556 F.

2d 167

14 Fair Empl.Prac.Cas. 1210, 14 Empl. Prac.

Dec. P 7506
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION et
al.
v.
AMERICAN TELEPHONE AND TELEGRAPH COMPANY
et al.,
Communications Workers of America AFL-CIO (CWA)
(Intervening
Defendants),
Telephone Coordinating Council, TCC-1 (national Bell
Council) et al., intervening defendants.
Appeal of COMMUNICATIONS WORKERS OF AMERICA,
in No. 76-2217.
Appeal of the TELEPHONE COORDINATING COUNCIL,
TCC-1, IBEW,
in No. 76-2281.
Appeal of ALLIANCE OF INDEPENDENT TELEPHONE
UNIONS, in No. 76-2285.
Nos. 76-2217, 76-2281 and 76-2285.

United States Court of Appeals,

Third Circuit.
Argued Feb. 14, 1977.
Decided April 22, 1977.

William J. Kilberg, Sol. of Labor, Carin Ann Clauss, Associate Sol. of

Labor, Dept. of Labor, J. Stanley Pottinger, Asst. Atty. Gen., David L.
Rose, James S. Angus, Attys., Dept. of Justice, Washington, D. C., Abner
W. Sibal, Gen. Counsel, Joseph T. Eddins, Associate Gen. Counsel,
Beatrice Rosenberg, Asst. Gen. Counsel, James P. Scanlan, Atty., E. E. O.
C., Washington, D. C., for appellees.

Thompson Powers, Jane McGrew, Morgan D. Hodgson, Steptoe &

Johnson, Washington, D. C., for American Telephone & Telegraph
Company, et al.; James A. DeBois, American Tel. & Tel. Co., New York
City, Bernard G. Segal, Barry Simon, Schnader, Harrison, Segal & Louis,
Philadelphia, Pa., of counsel.
Richard H. Markowitz, Miriam L. Gafni, Markowitz & Kirschner,
Philadelphia, Pa., for Communications Workers of America; Charles V.
Koons, Matthew A. Kane, Kane & Koons, Washington, D. C., of counsel.
Elihu I. Leifer, Sherman, Dunn, Cohen & Leifer, Washington, D. C.,
Louis H. Wilderman, Meranze, Katz, Spear & Wilderman, Philadelphia,
Pa., for IBEW Council.
Abraham Weiner, Paul M. Levinson, Mayer, Weiner & Levinson, New
York City, for Alliance of Independent Telephone Unions.
Before SEITZ, Chief Judge, and ALDISERT and GIBBONS, Circuit
Judges.
OPINION OF THE COURT
GIBBONS, Circuit Judge.

This is an appeal by three labor unions: the Communications Workers of

America (CWA), the Telephone Coordinating Council TCC-1, International
Brotherhood of Electrical Workers (IBEW), and the Alliance of Independent
Telephone Unions (Alliance) (hereinafter referred to collectively as the
intervening defendants). The order below denied their motions to modify a
consent decree, dismissed the motion of CWA for a preliminary injunction
against continued implementation of an affirmative action override provided for
by the decree, and granted the motion of the plaintiffs and the original
defendants for the entry of a supplemental injunctive order. The plaintiffs are
the Equal Employment Opportunity Commission (EEOC), the Secretary of
Labor, and the United States. Their complaint, filed on January 18, 1973,
charged violations of the Fair Labor Standards Act, of Title VII of the Civil
Rights Act of 1964, and of Executive Order 11246. The defendant is the
American Telephone and Telegraph Company (AT&T), appearing for itself and
on behalf of its associated telephone companies in the Bell System. On the
same day that the complaint was filed AT&T answered, denying the violations
alleged. However, it simultaneously approved and consented to a decree which
embodied and was designed to enforce a negotiated agreement under which

AT&T undertook to implement a model affirmative action program. That

program was designed to overcome the effects of past employment
discrimination in the Bell System with respect to women, blacks, and other
minorities. The intervening defendants contend that the consent decree, as
originally agreed to and as supplemented, conflicts with provisions of collective
bargaining agreements between them and AT&T, and otherwise unlawfully
invades rights of their members respecting competitive seniority in transfer and
promotion.1 We affirm.I. THE CONSENT DECREE
2

In November 1970, AT&T filed with the Federal Communications Commission

(FCC) a proposed tariff which would increase interstate telephone rates. Before
that filing was acted on, EEOC filed with the FCC a petition requesting that the
increase be denied because AT&T's operating companies were engaged in
systemwide discrimination against women and minorities. The FCC initiated a
special proceeding to consider the charges, holding 60 days of hearings in 1971
and 1972. A number of organizations intervened in support of the EEOC. While
the hearings progressed, settlement negotiations took place between AT&T and
the government parties, which eventually led to the termination of the FCC
special proceeding and the entry of the Consent Decree. Although the Alliance
of Independent Telephone Unions did not participate in negotiating the Consent
Decree, the IBEW did participate, and CWA was invited to do so but remained
deliberately aloof. 365 F.Supp. at 1108, 1109.

The Bell System is one of the largest employers in the United States.
Traditionally, its operating companies have been organized along departmental
lines. The plant department has been responsible for installation and
maintenance of physical facilities such as central office equipment,
transmission lines, and subscriber telephones. The traffic department has been
responsible for putting calls through, operator assistance, information, and
related services. The commercial department has handled subscriber sales and
billing. The accounting department has performed the bookkeeping and
accounting functions. Until at least the late 1960's, Bell System hiring practices
generally followed departmental lines. The plant department, in which craft
jobs predominated, was traditionally a male preserve, while female employees
were generally employed as operators, bookkeepers, or in other clerical
occupations in the traffic and commercial departments. Pay scales at both entry
and higher levels in the plant department were, and remain, higher than for
employees with comparable length of service in the other departments.
Transfers from the traffic or commercial departments were possible, but there
was a general policy of slotting a transferred employee in at the next higher pay
rate than that last enjoyed in the previous position. Since traffic and
commercial employees had lower starting rates and lower rates at each step of

the wage progression schedule, that policy resulted in a transferee to the plant
department receiving a lower rate of pay than would an employee performing
the same job who had been hired on the same date, but who had started in the
plant department. These hiring practices resulted in a concentration of males
and females in certain classifications. Moreover, there was an imbalance
between the racial and ethnic composition of the work forces of many operating
companies and the racial and ethnic makeup of their available labor markets.
The intervening defendants do not dispute that past patterns and practices were
discriminatory, nor do they dispute that the present work force in many Bell
System departments still reflects those past patterns and practices.
4

The Consent Decree directs the Bell System Companies to establish goals and
intermediate targets to promote the full utilization of all race, sex, and ethnic
groups in each of fifteen job classifications. The intermediate targets, set
annually, reflect the representation of such groups in the external labor market
in relevant pools for each operating company's work force. The intermediate
targets are the major prospective remedies in the Consent Decree. When any
Bell Company is unable to achieve or maintain its intermediate target, applying
normal selection standards, it is required by the decree to depart from those
standards in selecting candidates for promotional opportunities. It must then
pass over candidates with greater seniority or better qualifications in favor of
members of the under-represented group who are at least "basically qualified."
Without this affirmative action override, the greater time in title of incumbent
members of the overrepresented race, sex, or ethnic group would inevitably
reduce the opportunity for advancement of the under-represented groups and
would perpetuate the effects of the former discrimination. The affirmative
action override applies, however, only to minority promotional opportunity. A
promotion under the override does not result in any increase in competitive
seniority for purposes of layoff or rehire, as to which the collective bargaining
agreements control.2 The life of the decree is six years, ending on January 17,
1979. It provides that AT&T may bargain collectively with collective
bargaining representatives for alternative provisions which would also comply
with federal law. No such alternative provisions have been presented to the
district court.

II. THE SUPPLEMENTAL ORDER

5

In an interim report on compliance with the Consent Decree it appeared that in

a number of specific categories the Bell Companies fell short of attaining
intermediate targets promulgated for 1973. The government plaintiffs and
AT&T jointly moved for the entry of a supplemental order aimed at remedying
these deficiencies and assuring future achievement of targets and goals. The

supplemental order provides that unmet targets shall be carried forward in

certain establishments and job classifications. For a two month period ending
on October 24, 1976 some Bell Companies were required to make all
placements in affected job classifications from groups as to which their targets
had not been met. The supplemental order also provides for the creation of a
Bell System Affirmative Action Fund and its expenditure on projects which
will advance the objects of the decree. It also articulates the understanding of
the parties that while the original Consent Decree was not intended to supplant
the collective bargaining agreements, to the extent that any provisions of the
latter would prevent the achievement of the affirmative action targets and
goals, the decree controlled. The carry-forward provisions of the supplemental
order do not enlarge the Bell Companies' total affirmative action obligations
under the Consent Decree, nor do they extend its life.
III. BELL SYSTEM PROMOTIONAL SENIORITY
6

Since the only alleged conflict between the collective bargaining agreements
and the Consent Decree and supplemental order relates to promotional
seniority, our starting point is a description of bargained-for promotional
practices. The contracts between AT&T and each of the intervening defendants
are not identical. As to each intervening defendant there are also variations, in
contracts with specific operating companies, negotiated locally to reflect local
conditions and practices. However, a common feature of all the agreements is
that seniority for all purposes is determined by "net credited service" in any
department in the Bell System. It is also common to provide that in selecting
employees for promotion, other factors being equal, the Company will promote
the employee with the greatest net credited service. However, it is clear that the
company has not bargained to the union any role in the determination of
employee qualifications. Some agreements refer to "the employee whom
Company finds is best qualified." Others speak of "ability, aptitude, attendance,
physical fitness for the job, and proximity to the assignment." Some agreements
even qualify the seniority-equal qualification language by language to the effect
that "(n)othing in this paragraph shall be construed to prevent Company from
promoting employees for unusually meritorious service or exceptional ability."
Although their approach to the alleged conflict between the Consent Decree and
their collective bargaining agreements is not identical the intervening
defendants agree that the bargained-for promotional system is a merit selection
system. Management determines the employee best qualified in its judgment,
but seniority decides the issue where two employees are considered by
management to be equally qualified. The effect of the affirmative action
override, then, where and when it operates, is to eliminate from consideration
those employees who would normally have been selected under pre-decree

practice. The decree provides for selecting, from the under-utilized group of
persons, those who in the judgment of management are "basically qualified."
Although the briefs of the intervening defendants stress the issue of competitive
seniority, the real dispute is less over seniority, which under the contracts
would only be determinative in cases of equal qualification, as over the
departure from the "best qualified" criterion. The continued operation of that
criterion would, of course, significantly confine promotions within
departmental lines, as has been the past practice, since experience in the
department will always be a significant factor in an employee's qualification
level. By executing the Consent Decree AT&T has agreed, in the instances in
which the affirmative action override applies, to limit its bargained-for
management prerogative of determining the employee best qualified for
promotion, so long as it promotes a basically qualified applicant from an underrepresented group. The unions urge that it may not do so without illegally
breaching their collective bargaining agreements and the rights of some of the
employees they represent.
IV. THE UNION CONTENTIONS
7

Claiming standing as representatives of their members and by virtue of the

conflict between the affirmative action override and the collective bargaining
agreements, the intervenor unions attack the Consent Decree on a number of
grounds. Some of these grounds transcend the issue of the purported conflict
between the decree and the collective bargaining agreements. They recognize
that in making their broad-gauged challenge they may be acting inconsistently
with the best interests of some of the persons whom they represent in the
collective bargaining process, but point out that this potential conflict is
inherent in the collective bargaining relationship. See Emporium Capwell Co. v.
Western Addition Community Organization, 420 U.S. 50, 95 S.Ct. 977, 43
L.Ed.2d 12 (1975). Since the unions object to the claimed inconsistency
between the decree and the promotional seniority provisions of their contracts,
they have standing to assert all grounds of invalidity of the decree which would
result in the elimination of that conflict. Moreover they are appropriate
representatives of their members within the standing test of Sierra Club v.
Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972). Thus we will
consider each of their statutory and constitutional challenges, as well as the
contention that entry of the decree was an abuse of the district court's
discretion.

8A. The Consent Decree and Third Party Interests

9

The unions contended in the district court, and contend somewhat less

vigorously here, that it was improper in a Consent Decree to award relief

affecting third party rights. That objection is meritless. To the extent that third
party rights in which the unions are interested have been affected, they were
allowed to intervene and be heard in this case. They do not dispute the factual
predicate of the decree, the prior patterns and practices of discrimination. If this
were a litigated judgment the fact that they and their members did not cause the
discrimination would not prevent relief affecting third parties. See Franks v.
Bowman Transp. Co., 424 U.S. 747, 778, 96 S.Ct. 1251, 47 L.Ed.2d 44 (1976).
At best, in a fully litigated case, they would be entitled to be heard only on the
appropriateness of the remedy. They have been heard on that aspect of the case.
Class actions frequently affect the interests of persons who are before the court
only by virtue of the opting out provisions of Fed.R.Civ.P. 23(c). We have
approved the settlement of those actions even over the objection of class
members who think additional relief should have been granted. E. g. Bryan v.
Pittsburgh Plate Glass Co., 494 F.2d 799 (3d Cir.), cert. denied, 419 U.S. 900,
95 S.Ct. 184, 42 L.Ed.2d 146 (1974); Ace Heating & Plumbing Company v.
Crane Company, 453 F.2d 30 (3d Cir. 1971).
10

These cases hold that approval of such a settlement, arrived at after negotiations
between the defendant and the class representative, will be reversed only if the
court abused its discretion in approving it. There is, of course, a difference
between approving a settlement benefiting a plaintiff class whose
representative negotiated it, and approving a settlement imposing burdens on
an unrepresented class of defendants. The recognition of that difference was the
very reason why in Equal Employment Opportunity Commission v. American
Telephone & Telegraph Company, supra, 506 F.2d at 741-42, we held that
CWA could move to intervene as a defendant. Following intervention the
unions were permitted a full opportunity to convince the court that the relief
AT&T had agreed to went beyond that required to remedy the violation. The
posture of the case before us is, for all practical purposes, that of a fully
litigated decree.

B. The 703 Contention

11

Advancing essentially the same argument that we expressly rejected in United

States v. Int'l Union of Elevator Const., 538 F.2d 1012, 1019 (3d Cir. 1976), the
intervening defendants urge that 703(a), 703(h) and 703(j) of Title VII, 42
U.S.C. 2000e-2(a), (h), (j), prohibit the district court from providing for an
affirmative action plan containing interim targets and goals, and prohibit an
affirmative action override. As we noted in Elevator Constructors, that
argument is foreclosed by Franks v. Bowman Transp. Co., supra, 424 U.S. at
757-62, 96 S.Ct. 1251. Even the Justices who wrote separately in Franks

acknowledged that 703 is not a statutory limitation upon the remedial

authority conferred on the district courts by 706(g), 42 U.S.C. 2000e-5(g).
C. The 706(g) Contentions
12

The intervening defendants also urge several separate challenges to the decree,
based on their interpretation of 706(g). The first of these is that the section
prohibits quota remedies, and that the interim targets and goals of the Consent
Decree amount to such a remedy. That challenge is also foreclosed by Elevator
Constructors, supra, and we will not repeat the analysis of the legislative
history of the 1972 amendments to Title VII upon which we relied in rejecting
it.3

13

The unions contend that Elevator Constructors is distinguishable in that it did

not deal with competitive seniority but only with new hires. In one sense that is
true, for the case dealt with a remedy in an industry where employers relied
upon a hiring hall and a transitory work force. But the blunt fact is that the
union membership quota remedy we approved in Elevator Constructors did
involve competitive seniority with respect to referrals from a hiring hall. 538
F.2d at 1017-18. More significant than our decision in the hiring hall context,
however, is the Supreme Court's holding in Franks v. Bowman Transp. Co.,
supra, that a change in competitive seniority is a permissible 706(g) remedy.
We are not free to reconsider the issue. Even if we were we do not think it is
appropriately presented in this case, since the decree actually preserves layoff
and rehire competitive seniority, and only modifies the method of selection for
promotion and transfer. It affects not all seniority rights, but only some. And
among two equally basically qualified under-represented group applicants, for
example, the seniority provisions would still operate, even with respect to
promotion and transfer.

14

The unions' major challenge to the decree, however, is that in all our prior Title
VII remedy cases, and in those in the Supreme Court as well, the remedy
provided relief only in favor of identifiable victims of specific past
discrimination. They contend that 706(g) proscribes any decree, even in a
class action, which would permit relief to a minority group member who could
not so identify himself.

15

The intervenor defendants misread our prior authority. Nothing in the decree
which we approved in Elevators Constructors limited its applicability to blacks
who had applied and been rejected for membership in the union. The decree ran
to the benefit of the class of persons found to have been underutilized by virtue
of a discriminatory pattern or practice. Moreover, the contention ignores the

fact that in this case the United States sued to enforce Executive Order No.
11246. In Contractors Ass'n of Eastern Pa. v. Secretary of Labor, 442 F.2d 159
(3d Cir. 1971), we held that the Executive Order was a valid effort by the
government to assure utilization of all segments of society in the available labor
pool for government contractors, entirely apart from Title VII. Certainly that
broader governmental interest is sufficient in itself to justify relief directed at
classes rather than individual victims of discrimination. It is undisputed that the
Bell System is a major governmental contractor.
16

We could rest on Elevator Constructors and Contractors of Eastern Pa. as

controlling precedents in this Circuit. However, since it seems likely that
review will be sought in the Supreme Court it is appropriate that we discuss the
merits of the unions' contention that 706(g) proscribes class relief to classes
which may contain persons who are not identifiable victims of specific
discrimination.

17

Before doing so, we note that even if we were to accept the unions' position on
706(g), this decree would have a large scope of valid operation. The chief
charge is that for years Bell System hiring practices steered certain classes of
persons into certain departments. Any member of the affected class who
became a Bell System employee during the time the practices operated was
affected by them, at least to the extent that he or she was not informed that
employment opportunities might exist in other departments. We do not think
that Congress, in enacting Title VII, intended that 706(g) remedies be
available only to those knowledgeable enough and militant enough to have
demanded and been refused what was not in fact available. All who became
employees while the challenged employment practices operated were
individual victims of the practice. Thus the unions' objection only goes to the
possibility that some minority group members, hired after the offending
practices ceased, might be able to take advantage of the affirmative action
override. No record was made in the district court, by the intervening
defendants or anyone else, to establish whether there is a significant number of
such persons. Recognizing that there are thousands of class members who
could validly be protected, even on the unions' construction of 706(g), we
would find it extremely difficult to set aside the decree in the absence of such a
record. The district court in framing a remedy could certainly balance the
possibility that some recent hires who were not affected by the offending prior
practices might be advantaged against the practicality that the decree had to be
simple enough in operation to achieve its main purpose. Thus, we would not
reverse even if we agreed with the intervening defendants' interpretation of
706(g).

18

That interpretation rests upon the last sentence of that subsection:

19 order of the court shall require the admission or reinstatement of an individual

(n)o
as a member of a union, or the hiring, reinstatement, or promotion of an individual as
an employee, or the payment to him of any back pay, if such individual was refused
admission, suspended, or expelled, or was refused employment or advancement or
was suspended or discharged for any reason other than discrimination on account of
race, color, religion, sex, or national origin or in violation of section 2000e-3(a) of
this title.
20

The unions urge that any relief going beyond class members who can show that
they, rather than the class to which they belong, have been discriminated
against is proscribed.

21

The last sentence in 706(g) must be read in light of the settled construction of
the rest of the section. That settled construction is that once a prima facie
showing is made that an employer has engaged in a practice which violates
Title VII, the burden shifts to it to prove that there is a benign justification or
explanation.4 The last sentence of 706(g) says precisely that. Obviously, an
employer can meet an individual charge by showing that although that
individual was a member of the disadvantaged class he was also a thief, or a
drunk or an incompetent, and was for such a reason denied employment or
promotion. But the sentence does not speak at all to the showing that must be
made by individual suitors, or class representatives on behalf of class members,
or the EEOC on behalf of class members. The sentence merely preserves the
employer's defense that the non-hire, discharge, or non-promotion was for a
cause other than discrimination. Nothing in the Consent Decree prevents AT&T
from asserting that defense with respect to individual applicants for promotion,
and it is difficult to see what interest the unions have in it.

22

The sparse legislative history available on the bills which became Title VII
confirm our interpretation of the sentence. In H.R. 7152, what is now 706(g)
appeared as 707(e). A section-by-section analysis contained in
H.R.Rep.No.914, 88th Cong. 1st Sess. (1964), states of the latter:

23 order of the court may require the admission or reinstatement of an individual

"(n)o
as a member of the union or the hiring, reinstatement, or promotion of an individual
as an employee or payment of any back pay if the individual was refused admission,
suspended, or separated, or was refused employment or advancement, or was
suspended or discharged for cause." EEOC, Legislative History of Titles VII and XI
of Civil Rights Act of 1964 (hereinafter referred to as "Legislative History"), p. 2029
(emphasis supplied).

24

"For cause" clearly refers to an employer's defense. H.R.7152 went directly to

the floor of the Senate, where major changes were made. None, however,
substantively affected 707(e) except that sex was included among the
proscribed bases of discrimination, and the section was renumbered to 706(g).
Confirming the Senate's understanding that the last sentence merely preserved
the employers' defense is the comparative analysis of the Senate and House
bills printed in the Congressional Record on June 9, 1964:

25

Legislative History at 3027.

26

The intervening defendants rely on what they consider to be contrary

indications in an explanatory memorandum on 707(e) by Senators Clark and
Case. Legislative History at 3044. We place no reliance on this ambiguous
reference, since the section-by-section analysis quoted above is a more
authoritative indication of congressional understanding. We also note that in
considering the 1972 amendments to Title VII, Congress rejected the Ervin noquota amendment to the 1972 Act. It did so after specific discussion of United
States v. Ironworkers Local 86, 443 F.2d 544 (9th Cir.), cert. denied, 404 U.S.
984, 92 S.Ct. 447, 30 L.Ed.2d 367 (1971). The Ironworkers remedy, like that in
our Elevator Constructors case, supra, included a new membership provision
not limited to identifiable victims of specific past discrimination. As we pointed
out in the latter case, the solid rejection of the Ervin amendment confirmed the
prior understanding by Congress that an affirmative action quota remedy in
favor of a class is permissible. 538 F.2d at 1019-20. We are reinforced in our
conclusion that class relief, without regard to the victim status of every class
member, is appropriate by the firm consensus in the courts of appeals upon the
lawfulness of class-based hiring preferences and membership goals.5

27

We find meritless the proposal that we distinguish, for purposes of the

availability of class action relief, between new hires and those already
employed. Nothing in the language of the last sentence of 706(g), upon which
the intervening defendants base their individualized remedies argument,
suggests such a distinction. Class action relief is equally available to both new
hires and employees. The only distinction between the two classes is that in
considering a seniority or promotion remedy, a court of equity must take into
account expectations of other incumbent employees. But those incumbent
employees will be affected identically by a remedy in favor of identifiable
victims of specific discrimination as by a remedy which includes employee
members not so identifiable. The impact on incumbent employees goes to the
scope rather than the availability of class relief.6

28

Summarizing, none of the intervenors' interpretations of 706(g), urged upon

us as prohibitions against the intermediate targets, the employment goals, or the

affirmative action override, persuade us.D. Abuse of Discretion
29

We turn then to the contention that even assuming the existence of statutory
authority, the district court abused its discretion in refusing to grant the unions'
motions to modify the Consent Decree, and in entering the Supplemental Order.
As with equitable remedies generally, the scope of relief is a matter entrusted in
the first instance to the trial court. As the Supreme Court has made plain,
however

"30. . . that discretion imports not the court's ' "inclination, but . . . its judgment; and
its judgment is to be guided by sound legal principles." ' Discretion is vested not for
purposes of limit(ing) appellate review of trial courts, or . . . invit(ing) inconsistency
and caprice, but rather to allow the most complete achievement of the objectives of
Title VII that is attainable under the facts and circumstances of the specific case. 422
U.S., at 421 (95 S.Ct. 2362.) Accordingly the District Court's denial of any form of
seniority remedy must be reviewed in terms of its effect on the attainment of the
Act's objectives under the circumstances presented by this record." Franks v.
Bowman Transp. Co., supra, 424 U.S. at 770-71, 96 S.Ct. at 1267.
31

In Franks, the Court reviewed the denial rather than the award of relief, but it is
equally relevant to the scope of appellate review of the award of relief as well.
As we pointed out in Part IV A, supra this case comes to us after actual
litigation by the intervening defendants over the scope of relief. Thus it is
closer, procedurally, to Franks v. Bowman, supra, than to Bryan v. Pittsburgh
Plate Glass Co., supra, and Kober v. Westinghouse Electric Corp., 480 F.2d
240, 247-50 (3d Cir. 1973), in which we reviewed settlements objected to by
plaintiff class members. But whether we apply the standard of appellate review
for litigated Title VII cases or that for review of settlements, considerable
deference must be accorded the decision of the trial judge as to remedy.

32

The intervening defendants do not dispute that past hiring practices violated the
law, that the makeup of the work force in many Bell System departments
reflects the present effects of those past practices, or that continuance of the
"best qualified" criterion for promotion, by rewarding experience in a given
department, would tend to perpetuate those effects. Nor have they urged
(except in their general attacks against all affirmative action targets and goals)
that relating the targets and goals to minority representation in the available
work force was error. They do contend that other means of attaining those
goals might have been resorted to, and might be equally effective. But the
decree preserves for the unions the opportunity to bargain collectively for such
alternative means. The district court gave careful consideration to all the union's

objections, and struck an appropriate balance between the integrity of the

collective bargaining process and the necessity for effective relief. The
affirmative action override was not applied across the board, but only when
necessary to bring particular work units into compliance. The intermediate
targets and the goals remain subject to periodic review and adjustment. The
decree is short lived. It makes no intrusion upon competitive seniority for
layoffs or rehires. In the circumstances we cannot say that the court abused its
discretion.
E. Constitutional Challenges
33

Finally, the intervening defendants challenge the decree on the ground that any
court-imposed remedy requiring a quota, target or goal defined in terms of sex,
race or national origin violates the due process clause of the fifth amendment.
In its broadest reach, this argument is that any class action remedy for
discrimination against minorities is unconstitutional, for any such remedy of
necessity defines the protected class. We are not asked to go quite that far. The
unions do not object to the provisions of the decree prohibiting employment
discrimination in the future. Their objection is to the provisions for overcoming
the effects of past practices. We have rejected the same constitutional
arguments against affirmative action remedies in the past. United States v. Int'l
Union of Elevator Const., supra, 538 F.2d at 1018; Erie Human Relations
Comm'n v. Tullio, supra; Contractors Ass'n of Eastern Pa. v. Secretary of
Labor, supra, 442 F.2d at 176. See Oburn v. Shapp, 521 F.2d 142, 149 (3d Cir.
1975) (Garth, J.). The intervening defendants would have us distinguish these
cases because they did not involve competitive seniority, and thus did not
involve contractual interests of other employees. We pointed out above that
Elevator Constructors did involve competitive seniority. But in any event the
proposed distinction is unavailing. Franks v. Bowman Transp. Co., supra,
holds that the contractual interest of an employee in competitive seniority must
yield to an appropriate Title VII remedy. See 424 U.S. at 778, 96 S.Ct. 1251.
Federal statutory remedies need not be color blind or sex unconscious.7

34

We recognize that the remedy adopted by the district court can operate to the
disadvantage of members of groups which have not previously been
discriminated against compared to members of sex or racial groups previously
subject to discrimination who have not themselves been discriminated against.
The remedy thus constitutes federal action which classifies by membership in a
sex or racial group, and must be held invalid under the equal protection
guarantee inherent in the due process clause of the Fifth Amendment unless it
can be shown that the interest in making the classification is sufficiently great.

35

The standard applied by the Court in evaluating that interest has differed
somewhat for sex as opposed to racial classifications. Racial classifications are
subject to strict scrutiny: the federal "purpose or interest" must be "both
constitutionally permissible and substantial," and the "use of the classification"
must be " 'necessary . . . to the accomplishment' of (the) purpose or the
safeguarding of (the) interest." In re Griffiths, 413 U.S. 717, 721-2, 93 S.Ct.
2851, 2855, 37 L.Ed.2d 910 (1973) (footnotes omitted). On the other hand,
"classifications by gender must serve important governmental objectives and
must be substantially related to achievement of those objectives." Craig v.
Boren, 429 U.S. 190, 197, 97 S.Ct. 451, 457, 50 L.Ed.2d 397 (1976). The
present classifications are permissible in the case of race, and are thus
permissible a fortiori with respect to sex.

36

The federal interest in the present case is that of remedying the effect of a
particular pattern of employment discrimination upon the balance of sex and
racial groups would otherwise have obtained an interest distinct from that of
seeing that each individual is not disadvantaged by discrimination, since it
centers on the distribution of benefits among groups. This purpose is
"substantial" within the meaning of In re Griffiths, supra,8 where the Supreme
Court said that "a State does have a substantial interest in the qualifications of
those admitted to the practice of law . . . " 413 U.S. at 725, 93 S.Ct. at 2856.
The governmental interest in having all groups fairly represented in
employment is at least as substantial, and since that interest is substantial9 the
adverse effect on third parties is not a constitutional violation. Moreover, the
same exclusion of such members could conceivably result from remedies
afforded to individual victims of discrimination. This remedy operates no
differently. Furthermore, as we noted above, the affirmative action override is
necessary to the practical accomplishment of the remedial goal.

37

It will doubtless be possible to detail, and thus to employ remedies other than
quotas, for many individual instances of discrimination. But it is also true that
much discrimination cannot be proved through evidence of individual cases,
even though a prima facie case can be made out on the basis of statistical or
other evidence. It will, for example, be nearly impossible to show that
individuals were deterred from applying for hiring or promotion, or from
attempting to meet the prerequisites for advancement, because of their wellfounded belief that a particular employer would not deal fairly with members of
their particular sex or racial group. Moreover, even apart from problems of
proof, goals and quotas are necessary to counteract the effects of discriminatory
practices because some victims of discrimination no longer seek the job
benefits which they were discriminatorily denied. In such cases, quotas are
needed to counteract the effects of discriminatory practices upon the balance of

sex and racial groups that would otherwise have obtained.

38

The use of employment goals and quotas admittedly involves tensions with the
equal protection guarantee inherent in the due process clause of the Fifth
Amendment. But the remedy granted by the district court is permissible
because it seems reasonably calculated to counteract the detrimental effects a
particular, identifiable pattern of discrimination has had upon the prospects of
achieving a society in which the distribution of jobs to basically qualified
members of sex and racial groups is not affected by discrimination.

39

The judgment appealed from will be affirmed.

The decision appealed from is reported. Equal Employment Opportunity

Commission v. American Telephone & Telegraph Company, 419 F.Supp. 1022
(E.D.Pa.1976). The prior history of this protracted litigation may be gleaned
from Equal Employment Opportunity Commission v. American Telephone &
Telegraph Company, 506 F.2d 735 (3d Cir. 1974) affirming in part and
remanding in part 365 F.Supp. 1105 (E.D.Pa.1973). In that case, we recognized
that CWA would have standing to intervene as a defendant to protect its
existing collective bargaining agreements. Thereafter CWA, IBEW and
Alliance moved for and were granted leave to intervene as defendants for the
purpose of seeking modification of the consent decree

The consent decree, Part A, III-C provides:

Net credited service shall be used for determining layoff and related force
adjustments and recall to jobs where nonmanagement female and minority
employees would otherwise be laid off, affected or not recalled. Collective
bargaining agreements or Bell Company practices shall govern the confines of
the group of employees being considered. Provided, however, vacancies created
by layoff and related force adjustments shall not be considered vacancies for
purposes of transfer and promotion under this Section.

538 F.2d 1012, 1019-20

United States v. Int'l Union of Elevator Const., 538 F.2d 1012, 1017 & n. 8 (3d
Cir. 1976). See Franks v. Bowman Transp. Co., 424 U.S. 747, 772, 96 S.Ct.
1251, 47 L.Ed.2d 44 (1976). Cf. Albemarle Paper Co. v. Moody, 422 U.S. 405,
425, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975); McDonnell Douglas Corp. v.
Green, 411 U.S. 792, 802, 95 S.Ct. 1817, 36 L.Ed.2d 668 (1973)

E. g., United States v. Elevator Constructors Local 5, supra; Rios v.

Steamfitters Local 638, 501 F.2d 622 (2d Cir. 1974); United States v. Wood
Lathers Local 46, 471 F.2d 408 (2d Cir.), cert. denied, 412 U.S. 939, 93 S.Ct.
2773, 37 L.Ed.2d 398 (1973); United States v. N. L. Indus. Inc., 479 F.2d 354
(8th Cir. 1973); NAACP v. Beecher, 504 F.2d 1017 (1st Cir. 1974), cert.
denied, 421 U.S. 910, 95 S.Ct. 1561, 43 L.Ed.2d 775 (1975); United States v.
IBEW Local 38, 428 F.2d 144 (6th Cir.), cert. denied, 400 U.S. 943, 91 S.Ct.
245, 27 L.Ed.2d 248 (1970); Morrow v. Crisler, 491 F.2d 1053 (5th Cir.), cert.
denied, 419 U.S. 895, 95 S.Ct. 173, 42 L.Ed.2d 139 (1974); Southern Illinois
Builders Ass'n v. Ogilvie, 471 F.2d 680 (7th Cir. 1972); United States v.
Ironworkers Local 86, 443 F.2d 544 (9th Cir.), cert. denied, 404 U.S. 984, 92
S.Ct. 447, 30 L.Ed.2d 367 (1971); Patterson v. American Tobacco Co., 535
F.2d 257 (4th Cir.), cert. denied, 429 U.S. 920, 97 S.Ct. 314, 50 L.Ed.2d 286,
45 U.S.L.W. 3350 (U.S. Nov. 2, 1976) (Nos. 76-46, 76-56). Cf. Albemarle
Paper Co. v. Moody, 422 U.S. 405, 414 n. 8, 95 S.Ct. 2362, 2370, 45 L.Ed.2d
280 (1976):
The petitioners also contend that no backpay can be awarded to those unnamed
parties in the plaintiff class who have not themselves filed charges with the
EEOC. We reject this contention. The Courts of Appeals that have confronted
the issue are unanimous in recognizing that backpay may be awarded on a class
basis under Title VII without exhaustion of administrative procedures by the
unnamed class members. See, e. g., Rosen v. Public Service Electric & Gas
Co., 409 F.2d 775, 780 (C.A.3 1969), and 477 F.2d 90, 95-96 (C.A.3 1973);
Robinson v. Lorillard Corp., 444 F.2d 791, 802 (C.A.4 1971); United States v.
Georgia Power Co., 474 F.2d 906, 919-921 (C.A.5 1973); Head v. Timken
Roller Bearing Co., 486 F.2d 870 at 876; Bowe v. Colgate-Palmolive Co., 416
F.2d 711, 719-721 (C.A.7 1969); United States v. N. L. Industries, Inc., 479
F.2d 354, 378-379 (C.A.8 1973). The Congress plainly ratified this construction
of the Act in the course of enacting the Equal Employment Opportunity Act of
1972, Pub.L. 92-261, 86 Stat. 103.

See, e. g., Ostapowicz v. Johnson, 541 F.2d 394 (3d Cir. 1976), cert. denied,
429 U.S. 1041, 97 S.Ct. 741, 50 L.Ed.2d 753 (1977); Erie Human Relations
Comm'n v. Tullio, 493 F.2d 371 (3d Cir. 1974); Commonwealth v. O'Neill, 473
F.2d 1029 (3d Cir. 1973) (per curiam) (in banc ); Kirkland v. New York State
Dept. of Correctional Serv., 520 F.2d 420, 430 (2d Cir. 1975), cert. denied, 429
U.S. 823, 97 S.Ct. 73, 50 L.Ed.2d 84 (1976)

Our conclusion is strengthened by the Supreme Court's recent decision in

United Jewish Organization of Williamsburgh, Inc. v. Carey, 430 U.S. 144, 97
S.Ct. 996, 51 L.Ed.2d 229 (1977). There, the Court held that racial quotas
could permissibly be used to effect legislative reapportionment pursuant to a

constitutional federal statute. The claims of discrimination by petitioners were

unavailing where the racial reapportionment was designed to remedy the
effects of past discrimination. See also Franks v. Bowman Transp. Co., supra,
424 U.S. at 775 & n. 35, 96 S.Ct. 1251; United States v. Bethlehem Steel Corp.,
446 F.2d 652, 663 (2d Cir. 1971); Vogler v. McCarty, Inc., 451 F.2d 1236,
1238-39 (5th Cir. 1971)
8

The Court said in footnote 9 of its opinion that: "The state interest required has
been characterized as 'overriding,' (McLaughlin v. Florida, 379 U.S. 184, 196,
85 S.Ct. 283, 13 L.Ed.2d 222 (1964)); Loving v. Virginia, 388 U.S. 1, 11 (87
S.Ct. 1817, 18 L.Ed.2d 1010) (1967); 'compelling,' Graham v. Richardson, (403
U.S. 365, 375, 91 S.Ct. 1848, 29 L.Ed.2d 534 (1971)); 'important,' Dunn v.
Blumstein, 405 U.S. 330, 343 (92 S.Ct. 995, 31 L.Ed.2d 274) (1972), or
'substantial,' ibid. We attribute no particular significance to these variations in
diction."
See findings in House Judiciary Committee Report on H.R.7152, reprinted in
E.E.O.C., Legislative History of Titles VII and XI of Civil Rights Act of 1964
at 2018